"For the past 25 years, there have been two primary ways to finance the growth of local news growth: private equity and foundation grant-making. The first, of course, has fed the consolidation of newspaper chains that actually worsened the decline of local reporting. Thanks for nothing. Increased philanthropy has been tremendously important, but at this point there are not enough philanthropic dollars by themselves to get where we need to be."
"Creative lending approaches for media have worked well in Europe (via the Media Development Investment Fund), and in the U.S., they've been used in other areas, such as low-income housing, health care, and climate. Experiments are afoot to try these approaches in local news. The National Community Reinvestment Fund has created a "media resilience" fund with URL Media and Rebuild Local News. Several major foundations are quietly working up concepts for plans."
"In the past, this approach has been treated skeptically by both the philanthropic and social impact investment worlds. Those that focus on "double bottom line" investing would want media loans that would perform as well as other investments, which isn't plausible in the local news world. Others have understandably feared that loading revenue-anemic companies with debt could make matters worse."
Local news financing has largely depended on private equity and foundation grants, with private equity-driven consolidation worsening local reporting. Philanthropic funding has helped but cannot alone sustain the sector. Low-interest loans, concessionary lending, loan guarantees, catalytic investing, and social-impact investing offer middle-ground financing to support public-interest journalism. European models and U.S. experiments show promise, including a media resilience fund by the National Community Reinvestment Fund with URL Media and Rebuild Local News. Skepticism exists from impact investors seeking market returns and from those fearing debt for revenue-weak outlets. Targeted capital can support revenue growth and cash-flow needs alongside operational support.
Read at Nieman Lab
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